A Canadian Perspective of Peace, Order and Good Government in Ukraine Today

Too many Canadians of Ukrainian heritage may perceive that there is no peace, order or good government in Ukraine today, one year since the new Cabinet took office. I disagree.
Why is the phrase, “Peace, Order and Good Government” relevant to all Canadian citizens? These five words have been the cornerstone of Canada’s political DNA for almost 150 years. As an introductory phrase in our 1867 Constitution Act of Canada, they describe what we can expect from our Government. Canadian mythology holds that our constitutional mandate for “peace, order and good government” has made Canada a kinder, gentler place than the United States in its quest for “life, liberty and the pursuit of happiness”. Do we have “Peace, Order and Good Government” in Canada? Canadians believe so.

The Ukrainian Context: Prior to Ukrainian independence in 1991, Canada already had almost 125 years of political trial and error. Mainly peaceful. Ukraine’s last two years of nation-building, have been chaotic. Witness the Maidan Protest over Yanukovych’s refusal to sign the EU Association Agreement, which then escalated to become the Revolution of Dignity. Witness Russia’s invasion of Crimea and Eastern Ukraine after the abdication of President Yanukovych; two completely unprovoked aggressions in violation of all international treaties signed by Russia.

Nevertheless, only 3 months later (May 25, 2014) in the midst of chaos on the streets, Ukraine was able to successfully organize national Presidential Elections. Poroshenko, at age 49, became President with over 50% of the vote. And only 5 months after that (October 25) Parliamentary elections for 423 seats were held resulting in 56% new MPs elected versus 44% of former MPs returned.

A reformist Government: On December 2, 2014, compromises were reached and a new Dream Team Cabinet was formed. Headed by Prime Minister Yatsenyuk, age 40, who was joined by 24 cabinet ministers, average age 43, of various nationalities, and all but one English speaking (versus one who spoke English in the previous government). All were EU focused and committed. However, unlike our current Canadian Cabinet which is drawn from one party, they came from a loose coalition of parties.

Reflect on just 12 months ago, what this new Cabinet inherited: a downtown Kyiv charred and blackened; protesters still mourning and angry at the loss of the “Heavenly Hundred” lives; economic chaos; uncontrollable debt, almost no money left in the government reserves; the Hryvnia currency lost 2/3rds of its value; 40 banks failed and closed their doors; and not just inflation, but hyperinflation at 60%; Crimea occupied, and a Russian war in the East; a nation in shock.

Perceptions about Peace in Ukraine, one year later? There may be a semblance of peace if you visit various places in Ukraine; especially in the west. But dig underneath and you will see reality – people fearing for their future. No, Ukraine does not have ‘peace’. It is defending itself in an ongoing ‘hybrid war’, still being masterminded by Putin and Russia. The number of dead is over 9000; displaced refugees over 2 million; and 18,000 injured.

Minsk I did not work; and Minsk II is still not working: Russia has not removed its troops from Ukrainian sovereign soil (as per their agreement); the Ukrainian border with Russia is not secure, and even recently, OSCE Special Monitoring Mission Observers have been assaulted and blocked. ‘Lasting Peace’ is Ukraine’s and our Canadian objective, but at this moment it is at best tenuous; at worst, unattainable.

Perceptions about Order in Ukraine: do Ukrainians value order? Absolutely. They have fought for it, and continue to do so. Polls show that Ukrainians’ second priority is getting their economic house in order. Two dream team reform Ministers have taken the lead.

Ukraine, on the brink of economic collapse, needed a Miracle Finance Minister. Enter Natalie Jaresko, age 49, American, Harvard educated, with a young family, and 20 years of wealth management in Ukraine. She is smart, hard-working, and she agreed to sacrifice family life to throw herself into dealing with the economic nightmare facing Ukraine.

Unlike in Canada, (as witnessed by the Trudeau transition), there were no Ukrainian experts heading up a Prime Minister’s Transition Team, preparing the Ministers’ Mandates, offering competent political advisors, having briefing books prepared with Deputy Ministers ready to advise on the Minister’s first “10 day priorities” and the next “100 day objectives”.

Jaresko was in it alone. Almost. She did successfully insist that she bring her most trusted financial partner with her into government. Neither of them had any political experience. They drank from the firehose. They did more than survive; they took the financial world stage by storm. In the last 12 months, they succeeded in positively changing Ukraine’s international economic standing. The Minister of Finance’s first Budget was developed and passed by Parliament within her first month. Her second one successfully passed through Parliament a few of weeks ago. In her first year: banks were restructured – 63 closed, out of 180 (50 still to go). Public databases on owners of banks and real estate were set up. Electronic accounting and payments were introduced to eliminate opportunities for bribes and small time corruption. The International Monetary Fund (IMF), World Bank, European Bank for Reconstruction and Development (EBRD), and financial leaders from the European Union, USA, and Canada have shown confidence in this Minister.

Jaresko’s searing focus has been on keeping the country from bankruptcy and bringing economic order to Ukraine. So far, it has worked. Today, Ukrainian media headlines have touted Jaresko as being a possible next Prime Minister of Ukraine.

Ukraine also desperately needed an honest and dynamic Minister of Economic Development and Trade. Enter Aivaras Abromavicius, an energetic, Lithuanian, young (38 years old), educated in Estonia and USA, 20 years in investment and banking, including accountability for a regional multibillion dollar investment firm.

His challenges were numerous and enormous. One of his first was how to deal with the most vilified and disrespected ministry in Ukraine, which was seen as obstructionist to reform, to small businesses and to international investment. He inherited a large Ministry staff of 1,800 which he reduced by half immediately. He applied the same no nonsense approach with his Deputy Ministers. Unlike Canada, which has one Deputy Minister per department, Ukraine ministries had many, and he reduced his down to four. One of which was re-hired by the President’s Office, an omen which would haunt the Minister and undermine his effectiveness.

The Minister had the mandate to oversight all 3,300 state-owned enterprises. These were not departments or ministries, but the equivalent of ‘business’ entities providing services to citizens (much like our Crown Corporations in Canada). Instead of returning revenue to the State Treasury from their profitable operations, they instead had drained $100 Billion Hryvnia from the Treasury in the year prior to his appointment. He has stopped this. But this dynamic Minister needed the President’s and Parliament’s assistance to introduce cost savings, good corporate governance and to make these enterprises profitable before privatizing them (if they no longer served a public policy purpose). He never got this support.

Abromavicius’ many successes focused on open government and open data technology reforms. He strengthened foreign business investment in Ukraine and reduced red tape. He focused investment on youth and their information technology strengths. He was creating an electronic, transparent procurement process to reduce middle level pay-offs and bribes. Then he resigned abruptly, on February 2, 2016, sending a shockwave throughout Ukraine and among world leaders. The honest Minister named the President’s most senior assistant, Ihor Kononenko, as the source of undermining economic reforms. The President has turned the matter over to the Anti-Corruption Bureau for investigation. But the Minister’s resignation stands.

What is the status of Ukraine’s economic order? Until that moment, President Poroshenko could have rightfully claimed that state authority and economic order was being restored after the meltdown that followed Yanukovych’s flight. He had some strong leadership in key portfolios and international support for the continuing fight for economic reforms. These were positive signs that the macro-stabilization has been achieved, albeit it is still fragile.

Perceptions about Good Government in Ukraine: Recent opinion polls indicate that Ukrainian citizens do not believe they have good government. They survive with major job losses, pension cuts, and increased gas prices and taxes. They believe that reforms are too slow and that not enough has been done to strengthen the rule of law and fight corruption.

Not enough has been communicated about the National Reform Council, established by the President over a year ago. The comprehensive Reform Strategy for Ukraine has 8 strategic priorities, 33 major action items and hundreds of deliverables. Thousands of Ukrainians across all ministries, agencies and departments, as well as civil society have been mobilized.

The numerous necessary reforms were overwhelming. Where to begin? And where to find the expertise for many of the new concepts was a major challenge for Ukraine. A major superhuman effort has been made to address the required Principles and Guidelines to achieve European Union policies and standards. Leading experts from many countries, including Canada, have been assisting the introduction of EU Reforms. Over 300 EU monitors oversee Ukraine’s commitment to introduce these Principles.

Over the course of only one year, so much has been achieved. For example: hundreds of EU-oriented reform laws have already been adopted. More financial powers have been approved to the regions, with more taxes remaining at the local level. The legal basis for reforming local self-governance, including the necessary amendments the Constitution are being drafted. Ukrainian citizens will this year be able to travel visa-free in the EU. And, on January 1, 2016, Ukraine joined the deep and comprehensive Free Trade Area with the European Union. If the government sticks to their reform agenda and their very aggressive (almost impossible) deadlines, a true miracle can occur.

Good Government – Rule of Law and anti-corruption: these are two hot buttons that resonate with the civil society in Ukraine and the diaspora in North America that continue to need attention. One of the great challenges for the Ukrainian government (Executive, Legislative and Judicial branches) is to work together with common purpose for the citizens of Ukraine. Learning how to put the common good above the self-interests of the individual is not an easy cultural change.

Nor is dealing with corruption and rule of law; but progress has been made: the Prime Minister has dismissed 227 judges. A package of anti-corruption laws has been passed, a National Anti-Corruption Bureau established, and recently a State Bureau of Investigation was launched. The government eliminated the energy/gas ‘middleman’ (savings of billions of dollars). Parliament passed a new Lustration Law (firing corrupt officials) and identifying 600 on a list now, who can’t hold government jobs. $1.4B in assets belonging to Viktor Yanukovych and his clique has been frozen. A New Civil Service Law was passed, which will introduce a Code of Conduct for public servants, and compulsory, open competitions for CEOs of state-owned enterprises and also Deputy Ministers. The new Police Force has replaced and “de-militarizatized” the corrupt Soviet-era “militia”. The new “patrol police” has received great public reviews and today Serve and Protect, instead of Take and Abuse.

And over the last few weeks, the Ukrainian Parliament has been remarkably dynamic. It passed its second Budget, and showed signs of more optimism than despair. Next steps need to focus on caring more about everyday citizens, and moving away from taking care of the dozen oligarch families who have too much economic and political power. Passing legislation to privatize about 300 state owned enterprises that continue to funnel money to a few oligarchs would be a good start. This would provide some much needed money to pay for the social needs. And an appointment of a new Prosecutor General, one who is a true reformer, would be another positive sign.

Good Government – Democracy: on October 25, 2015, Ukraine successfully held local elections. This was a massive effort of democracy and civic engagement in the midst of economic turmoil, social tensions and war. This was no small feat: 200,000 candidates; 10,200 local Councils; involving 132 Parties. For the most part, these were peaceful.

Monitoring observer missions said they were reasonably orderly. And stronger, more representative democratic local governments, closest to people’s needs and lives, are absolutely essential for good governance. This was another major step in Ukraine’s ‘peace, order and good government agenda’.

We need to give Ukraine credit for the strides and achievements it has made. They have been significant! We need to continually remind them that there are still shortcomings, not only in the fight against corruption but also in terms of lifting the living standards. But Ukraine has crossed its Rubicon and is at a point of no return. Ukrainian citizens have sacrificed too much to allow a return to the past. And we, as Canadians, must continue to be there to support them.

Sure it matters, to some extent, “who” is in power. Pro-western, pro-democracy, duly-elected and non-corrupt parties matter. But who leads them, and who they are, matter less. We need to support those leaders who will complete the process of reform and transformation, and who can ensure a stable, healthy future for Ukraine and its citizens.

Paul Migus is a former Canadian government executive, who shares Canadian best practices in Ukraine and other countries. These remarks were shared with the Ukrainian National Federation, Ottawa-Gatineau Branch on January 20. 2016.

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